In general, the probate process can end up being very long and complicated. In some cases, probate can last for years and be costly for the estate. For example, if you live in Denver and pass away without a solid estate plan, your property could end up in probate. The longer it spends in probate, the less there will be to pass on to your heirs and beneficiaries. This is why it is important to take steps to avoid probate or at least drastically limit the time your estate spends in the process.
Fortunately, there are several options available to keep your property far away from the probate process. For instance, you can transfer your property into a revocable living trust or even make a gift of it prior to your death. You can also transfer your property through joint ownership or by naming death beneficiaries.
If you jointly own property with another person, then when one of you dies, that property will automatically pass to the joint owner without having to pass through probate. In order to create a joint ownership situation, you may need to create an official document that names the joint owners, describes, in detail, the property and lays out the terms of the right of survivorship.
Certain financial assets, such as retirement and pension accounts, allow you to name beneficiaries that will receive the assets upon your death. As soon as you die, these assets will automatically become the property of the named beneficiaries without the need to first pass through probate. This is because when you pass, these types of financial assets are no longer a part of your estate.
Revocable living trusts
With a revocable trust, you can transfer property into the care of a trustee whose duty it is to hold it for your benefit. Since the trust is revocable, you have the right to revoke the trust at any time. By transferring the property to a trust and naming a trustee to manage it for you, you have essentially removed this property from your estate. If the trust is still active when you die, then the trustee should transfer the property to the beneficiaries named in the trust documents. The transfer can take place without the property first going through the probate process.
Another option is to simply give your property away before you die. However, this takes some planning and could come with some tax consequences. It is probably best to reserve this strategy for low-value items that fall below the gift tax threshold.
If you want to avoid the probate process, it is best to explore various estate planning strategies. By having an effective estate plan in place, you can save your loved ones the stress of dealing with months or even years of probate.